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Monday, July 25, 2016

Can NITI Aayog prescribe some medicines to ailing PSUs?

NITI Aayog is analysing the sick and loss-making public sector undertakings (PSUs) in the country, Parliament was informed on last Friday. But the big question is can the government's think tank which replaced the earlier Planning Commission provide...

some relief to the ailing PSUs?

It is indeed a tough challenge before the Aayog in especially its CEO Amitabh Kant.

According to public enterprises survey of 2014-15, India has 77 loss-making central public sector enterprises (CPSEs), which include Air India, BSNL, MTNL and MRPL, Minister of State for Finance Arjun Ram Meghwal said in a written reply in Lok Sabha.

"An analysis of the sick and loss-making PSEs is underway in the NITI Aayog in consultation with the concerned ministries," he added.

The minister further said the concerned ministry monitors the sickness of the CPSEs and identify the sick/incipient/weal CPSEs functioning under their control based on performance and take redressal measures.

"They formulate revival/restructuring plans for such CPSEs on a case-to-case basis. After obtaining the approval of the competent authority, they implement the plan," he added.

Aayog has already submitted to the Prime Minister's Office two separate lists of sick and loss-making PSUs — one comprising those that can be closed down and the other of those that should be privatised. Following this report submitted to PMO last month, the Prime Minister’s Office has asked NITI Aayog CEO Amitabh Kant to identify one sick PSU. The man behind the Incredible India mission has been asked to come out with a detailed roadmap for its sell-off or eventual liquidation, before moving on to other such cases.

NITI Aayog had submitted two separate lists of sick and loss-making PSUs – one comprising those that can be closed down and the other of those that should be privatised.

Kant had earlier made the presentation on this road map before the PMO. Now he has been asked to identify one sick PSU that can be sold off or liquidated in the event of the sell-off exercise not fructifying, before moving on to other such cases, a daily quoting a senior government official reported.

Kant had earlier headed the Department of Industrial Policy and Promotion (DIPP). Kant has also been asked to chalk out a detailed plan for the sale or the eventual liquidation, which can be then taken to the Cabinet.

This will help the NDA government in fine tuning a comprehensive blueprint to sell loss-making PSUs or close down the entities that cannot be revived. Previous such attempts have not been very successful.

According to some reports, Aayug has identified 32 loss-making companies for strategic disinvestment, including Bharat Pumps & Compressors, Tyre Corporation of India, Central Inland Water Transport Corporation and Bengal Chemicals & Pharmaceuticals, among others. Of the 32 companies, 10 could see strategic disinvestment right away while for the other 22 the suggestion is to revive while retaining a subsequent option for strategic disinvestment.